Analyzing Fastenal (FAST) and DXP Enterprises (DXPE)
Fastenal (NASDAQ: FAST) and DXP Enterprises (NASDAQ:DXPE) are both retail/wholesale companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, analyst recommendations, dividends, earnings, profitability, valuation and institutional ownership.
Fastenal pays an annual dividend of $1.28 per share and has a dividend yield of 2.9%. DXP Enterprises does not pay a dividend. Fastenal pays out 70.3% of its earnings in the form of a dividend. Fastenal has increased its dividend for 6 consecutive years.
Volatility & Risk
Fastenal has a beta of 0.99, meaning that its share price is 1% less volatile than the S&P 500. Comparatively, DXP Enterprises has a beta of 2.64, meaning that its share price is 164% more volatile than the S&P 500.
This is a breakdown of current recommendations and price targets for Fastenal and DXP Enterprises, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Fastenal currently has a consensus price target of $50.50, suggesting a potential upside of 14.51%. DXP Enterprises has a consensus price target of $39.00, suggesting a potential upside of 31.45%. Given DXP Enterprises’ higher possible upside, analysts clearly believe DXP Enterprises is more favorable than Fastenal.
This table compares Fastenal and DXP Enterprises’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Institutional and Insider Ownership
83.0% of Fastenal shares are owned by institutional investors. Comparatively, 74.2% of DXP Enterprises shares are owned by institutional investors. 0.6% of Fastenal shares are owned by insiders. Comparatively, 9.6% of DXP Enterprises shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Earnings & Valuation
This table compares Fastenal and DXP Enterprises’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Fastenal||$4.13 billion||3.08||$952.46 million||$1.82||24.23|
|DXP Enterprises||$941.54 million||0.55||$59.70 million||$0.84||35.32|
Fastenal has higher revenue and earnings than DXP Enterprises. Fastenal is trading at a lower price-to-earnings ratio than DXP Enterprises, indicating that it is currently the more affordable of the two stocks.
Fastenal beats DXP Enterprises on 13 of the 18 factors compared between the two stocks.
Fastenal Company is engaged in wholesale distribution of industrial and construction supplies. The Company is engaged in fastener distribution, and non-fastener maintenance and supply business. As of December 31, 2016, it distributed these supplies through a network of approximately 2,500 stores. Its customers are in the manufacturing and non-residential construction markets. The manufacturing market includes both original equipment manufacturers (OEM) and maintenance, repair, and operations (MRO). The non-residential construction market includes general, electrical, plumbing, sheet metal and road contractors. Other users of its products include farmers, truckers, railroads, oil exploration, production and refinement companies, mining companies, federal, state, and local governmental entities, schools and certain retail trades. Its original product offerings are fasteners and other industrial and construction supplies, many of which are sold under the Fastenal product name.
About DXP Enterprises
DXP Enterprises, Inc. (DXP) is engaged in the business of distributing maintenance, repair and operating (MRO) products, equipment and service to industrial customers. The Company operates through three segments: Service Centers, Supply Chain Services and Innovative Pumping Solutions. The Service Centers segment provides MRO products, equipment and services, including technical expertise and logistics capabilities to industrial customers. The Supply Chain Services segment manages all or part of a customer’s supply chain, including procurement and inventory management. The Innovative Pumping Solutions segment provides source for engineering, systems design and fabrication. It operates from approximately 190 locations in over 40 states in the United States, approximately 10 provinces in Canada, Dubai and one state in Mexico. The Company’s product categories include rotating equipment, bearings & power transmission, industrial supplies, metal working and safety products & services.
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